Squarespace to acquire Google Domains: What it means for customers

Squarespace has announced plans to acquire assets associated with the Google Domains business, a move affecting approximately 10 million domains and millions of customers.

Google Domains will be winding down after a “transition period” is completed. The length of this transition has not been detailed or speculated by the website building and hosting firm.

Squarespace said that current Google Domains customers won’t see any changes to their renewal prices for at least 12 months after the deal is completed.

It will also be offering customers “additional incentives” to continue to spend with the company, building websites and benefiting from Squarespace’s other offerings.

As part of the deal, Google agreed to offer its infrastructure that’s dedicated to running Google Domains to ease the transition and transfer of domains, which Squarespace said it hopes to be “seamless”.

The transaction is expected to close in the third quarter of 2023, subject to regulatory approval. While neither company has confirmed the value of the deal to ITPro, the transaction is rumoured to be worth $180 million, according to Bloomberg.

“We are exceptionally proud to be chosen to serve the customers of the Google Domains business,” said Anthony Casalena, founder and CEO at Squarespace. 

“Domains are a critical part of web infrastructure and an essential piece of every business’s online presence. We look forward to serving these new customers as we have served millions using our domain products and are committed to ensuring a seamless transition.”

Google has been quick to reassure customers that there will be no immediate impact arising from the announcement.

Matt Madrigal, vice president and general manager for Merchant Shopping at Google, described the agreement as “in keeping with our efforts to sharpen our focus” and said that the Google Domains team would be helping with the transition.

How does Squarespace benefit from the Google Domains acquisition?

Although prices won’t immediately change, Squarespace will benefit from customers transitioned from Google Domains. 

While changes after the 12 months have yet to be announced, it’s likely that some form of alignment of billing tiers will have to be implemented.

In addition, it was announced that Google Domains customers will be offered “incentives” to adopt other Squarespace products. The nature of those incentives has yet to be disclosed.

It will also become the exclusive domain provider for any customer purchasing a domain along with their Google Workspace subscription for a minimum of three years.

Squarespace anticipates a meaningful bump in both revenue and cash flow from the deal and expects the majority of the benefits to be realized in 2024. 

In its last set of annual results, the company announced an 11% year-on-year growth in revenue for 2022 to $867 million. 

In an earnings call for Q1 2023 it announced a 16% increase in bookings to $266 million, driven in part by what chief financial officer Nathan Gooden called “the continued success of our price increases.”

What new offerings will Squarespace be able to offer customers?

While Google Domains is more of a domain registration service that includes some design tools and integrates with a number of website builders, Squarespace is an all-in-one website building and e-commerce platform. 

It is, however, debatable if existing Google Domains customers will be interested in Squarespace’s extra services since many will already have a preferred web builder and design tool.

Why did Google sell its domains business to Squarespace?

Google has not specifically given a reason for the sale, but it announced earlier this year its plan to make spending cuts across the business.

Like other industry giants, Google announced plans in January to reduce its workforce as part of a cost-cutting drive, for example. 

All product areas, functions, and levels were set to be affected, according to CEO Sundar Pichai.

Matt Madrigal’s comment in the acquisition announcement that the agreement was “in keeping with our efforts to sharpen our focus” is also a clear indicator that Google Domains was not a priority for the company.

How have Google’s customers reacted?

Reactions from the IT community across social media have been mostly negative. 

Replies to Squarespace’s Tweet on the subject included discussions on moving domains elsewhere, worries about pricing, and complaints directed at Google.

The trend has continued across other community forums, with complaints and suggestions for alternatives posted on Reddit.

ITPro contacted Google and Squarespace for comment.